By Tim McLaughlin
BOSTON, Aug 13 (Reuters) - Heron Power, a startup run by a former senior executive of EV maker Tesla, said on Thursday it plans to build a $100 million factory in California to make advanced transformers for the U.S. electric grid.
Heron said it will convert a former 286,000 square foot distribution warehouse 30 minutes south of San Jose into a facility to produce Heron Link, a 5-megawatt medium-voltage power conversion system for large-scale energy and data-center projects.
The company
had said in February it raised $140 million in a Series B round of funding that included investors Andreessen Horowitz and Breakthrough Energy Ventures.
Heron CEO Drew Baglino, who spent 18 years at Tesla, said he believes software-controlled, chip-based transformers can compete with conventional transformers filled with steel and oil.
SHORTAGE OF CRITICAL COMPONENTS
Baglino hopes to capitalize on the U.S. power grid's rapid transformation as booming demand from data centers, electric vehicles and heat pumps tests the limits of generation and transmission infrastructure, unprepared for the electrification of large parts of the economy.
As U.S. Energy Department officials noted during a March meeting, much of the U.S. grid still relies on 1960s and 1970s engineering and infrastructure. As a result, the country faces a shortage of the critical components that sustain it.
"There's definitely a supply challenge for new equipment," Baglino said. He said there's a lag of up to four years to get a standard transformer as most of the grid's critical components are imported.
Meanwhile, the power industry is expected to spend $1 trillion over the next decade building new power plants, renewable resources, battery charging facilities and high-voltage transmission lines.
Heron said it plans to begin mass production of its equipment in late 2027. Baglino declined to name any potential customers, but said he has had strong interest from electric utilities and data center developers.
"Any grid that's rapidly changing needs this type of electronics," Baglino said.
(Reporting by Tim McLaughlin; Editing by David Holmes)
